AI Powers Half of Asia’s 2025 Growth, Boosts Hiring Over Layoffs

In a recent interview with CNA’s Asia First programme, Sonal Varma, Nomura’s managing director and chief economist for India and Asia ex‑Japan, highlighted a striking finding from the firm’s latest research: artificial intelligence accounted for roughly half of the region’s gross domestic product expansion in 2025. The analysis also suggested that AI‑driven activity generated more employment than it displaced, a trend that could reshape labour markets across the continent, including Japan. This article examines the implications of those observations for Japanese policy, corporate strategy and the broader Asia‑Pacific economy.

Scale of AI Contribution to Regional Growth

Nomura’s estimate that about fifty per cent of Asia’s GDP growth in 2025 stemmed from artificial intelligence underscores the technology’s rapid diffusion across multiple sectors. The firm attributes this surge to a combination of increased chip exports, heightened investment in data centre capacity and the broader integration of AI tools into business processes. While the precise breakdown of each factor was not disclosed, the emphasis on hardware and infrastructure points to a supply‑side dynamic that aligns with the region’s ongoing push to secure semiconductor production capabilities.

For Japan, a country that has long positioned itself as a leader in advanced manufacturing and electronics, the finding reinforces the strategic importance of maintaining a robust semiconductor ecosystem. Ministries such as METI have already articulated plans to bolster domestic chip design and fabrication, and the Nomura data provides external validation that such efforts are essential not only for national competitiveness but also for sustaining regional economic momentum.

Moreover, the AI‑driven growth narrative dovetails with the Bank of Japan’s recent monetary stance, which has been calibrated to support investment in high‑technology sectors. By fostering an environment where AI‑related capital expenditure is encouraged, the BOJ can help ensure that Japan remains a pivotal node in the supply chains that underpin the continent’s expansion.

Employment Effects: More Hiring Than Firing

Varma’s comment that AI has generated more hiring than job cuts challenges a common narrative that automation inevitably leads to widespread displacement. The Nomura research suggests that the deployment of AI technologies has created new roles, particularly in areas such as data centre operations, chip manufacturing support, and AI system integration. While the report does not enumerate specific occupations, the qualitative observation aligns with trends observed in other high‑tech economies where demand for skilled technicians and analysts has risen.

In the Japanese context, this development may influence labour market policies overseen by the Ministry of Health, Labour and Welfare. Anticipating a shift toward AI‑centric job creation, the ministry could prioritize upskilling programmes that equip workers with competencies in machine learning, data analytics and hardware maintenance. Such initiatives would complement existing efforts to address the country’s ageing workforce and to sustain productivity growth.

Corporate Japan is also likely to respond by adjusting recruitment strategies. Large conglomerates and mid‑size firms alike may expand their talent pipelines for AI‑related functions, balancing the need for technical expertise with the broader corporate culture that values long‑term employment stability. The hiring trend highlighted by Nomura may therefore encourage Japanese firms to invest more heavily in internal training rather than relying solely on external hires.

Risks to Sustained Growth

Despite the optimistic tone regarding AI’s contribution, Varma warned of several risks that could temper future expansion. The reliance on chip exports and data centre construction introduces vulnerabilities related to supply chain disruptions, geopolitical tensions and energy availability. Any interruption in semiconductor supply, for instance, could reverberate across the AI ecosystem, given the tight coupling between hardware and software development.

Japan’s strategic position as a major semiconductor producer places it at the centre of these risk considerations. The Ministry of Economy, Trade and Industry (METI) has been monitoring export controls and foreign investment flows to safeguard domestic capabilities. In light of Nomura’s findings, METI may need to further diversify supply sources and reinforce domestic production capacity to mitigate external shocks.

Energy demand associated with expanding data centre capacity also raises concerns. The Ministry of Economy, Trade and Industry, together with the Ministry of the Environment, has been promoting renewable energy adoption and energy‑efficiency standards for data centres. Aligning AI‑driven growth with Japan’s carbon‑neutral targets will require coordinated policy measures that balance economic expansion with environmental commitments.

Implications for Japanese Technology Policy

The Nomura analysis reinforces the rationale behind Japan’s recent AI strategy, which emphasizes the development of foundational technologies, the creation of AI‑friendly regulatory frameworks, and the promotion of cross‑border collaboration. By quantifying AI’s impact on regional GDP, the report provides a data‑driven justification for continued public investment in research and development.

Key ministries, including METI and the Ministry of Internal Affairs and Communications (MIC), may leverage these insights to fine‑tune subsidy programmes for AI pilots, encourage public‑private partnerships, and streamline standards for data centre construction. The emphasis on chip exports also suggests that policies aimed at securing a stable supply of advanced semiconductors—such as incentives for domestic wafer fabrication—remain a priority.

Furthermore, the Bank of Japan’s monetary policy could be calibrated to support financing for AI‑related projects, especially for small and medium enterprises that require capital to adopt new technologies. By ensuring that credit conditions remain favourable for AI investment, the BOJ can help sustain the momentum identified by Nomura.

Corporate Response and Competitive Positioning

Japanese corporations are likely to interpret Nomura’s findings as a signal to accelerate AI integration across their operations. Companies in sectors ranging from automotive to finance have already begun embedding AI for predictive maintenance, customer analytics and supply chain optimisation. The reported hiring surge suggests that firms will need to expand their workforce in technical roles, prompting a reassessment of talent acquisition and development strategies.

In addition to internal upskilling, Japanese firms may seek collaborations with overseas AI specialists to access cutting‑edge algorithms and data sets. The Ministry of Foreign Affairs (MOFA) could facilitate such partnerships through diplomatic channels, ensuring that Japanese businesses remain competitive in a market where AI capabilities are increasingly a determinant of success.

Finally, the emphasis on data centre investment highlights an emerging market for Japanese construction and engineering firms with expertise in high‑density, low‑latency facilities. By positioning themselves as providers of AI‑ready infrastructure, these companies can capture a share of the growing demand that Nomura’s research attributes to the AI‑driven growth model.

Future Outlook and Strategic Recommendations

Looking ahead, the trajectory outlined by Nomura suggests that AI will continue to be a central engine of economic activity across Asia. For Japan, the challenge will be to translate this regional momentum into domestic advantage while managing the attendant risks. Policymakers should therefore pursue a balanced approach that strengthens semiconductor supply, expands data centre capacity, and aligns energy policy with sustainability goals.

On the labour front, the Ministry of Health, Labour and Welfare, together with industry bodies, ought to expand vocational training programmes that focus on AI‑related skills, ensuring that the workforce can meet the demand for new roles created by the technology. Such measures will help mitigate the risk of skill shortages and support the hiring trend highlighted by Varma.

Corporate leaders, meanwhile, should view the hiring surge as an opportunity to invest in human capital, fostering a culture of continuous learning that can adapt to rapid technological change. By aligning corporate strategy with national policy objectives, Japanese firms can both benefit from and contribute to the AI‑driven growth that is reshaping the Asia‑Pacific economy.

By Kenji Tanaka, Staff Writer

This article was produced with AI-assisted research and editorial support. Reporting is based on the source material cited below. Sources: CNA video report (16 September 2026); CNA; Global1.News